Prof Kingsley Moghalu, a former Deputy Governor of the Central Bank of Nigeria(CBN) has warned that the terrible suffering & economic loss Nigerians experienced due to the naira redesign and the judiciary’s meddling in the matter all point to the failure of Nigeria’s institutions.
Moghalu disclosed this in a statement in reaction to President Buhari’s insistence that he never ordered the apex bank to disregard the Supreme Court’s ruling.
Moghalu also warned that one day, Nigerians will count the losses to the Nigerian economy, the legitimacy and effectiveness of a once-prestigious institution, and the legitimacy of the Nigerian state itself due to the policy.
State failure: He stressed that the faulty implementation of the CBN policy introduced terrible suffering & economic loss to Nigerians.
- “The entry of the judiciary into central banking functions, all show clearly how our institutions— and Nigeria — fail
- “When institutions that are meant to be operationally independent become politicized. Currency functions are a core part of any central bank’s mandate. To that extent, I had no problem with the policy. Except for two vital issues. First, the 90-deadline, which I warned was too short to be effectively executed.
- “Second, the timing, so close to the elections. But, as later became clear, there was a haphazard and incoherent communication of the PURPOSES of the policy. In one breath it was said to be to reduce the money supply and help tame inflation.”
The terrible suffering & economic loss Nigerians have experienced as a result of the faulty IMPLEMENTATION of the Central Bank of Nigeria’s Naira redesign policy, the entry of the judiciary into central banking functions, all show clearly how our institutions— and Nigeria — fail
— Kingsley Moghalu OON (@MoghaluKingsley) March 14, 2023
Illegal loans to FG: He went further to claim that the plans to “reduce money supply” came after the CBN had lent N23 trillion to the federal government illegally because that was way beyond approved limits under the CBN Act of 2007.
- “Next, it was promoted as a national security measure to halt kidnapping, Naira hoarding, and sundry crimes.
- “Then, next, it became about “free and fair elections“ to stop vote-buying. This last reason became the most important — and controversial — reason as the tempo of the 2023 presidential contest rose to a boiling point. Expectedly, politicians who felt the policy targeted them.
- “Nigerians were trapped between the devil and the deep blue sea of a desire to curb the menace of vote-buying and the effective confiscation of their own money by the implementation failure of the policy.”
CBN’s mandate: He also asked what exactly the mandate of the CBN is, wondering if had it now become to end vote buying in elections. He added:
- “One day, we will count the losses, to the Nigerian economy, the legitimacy and effectiveness of a once-prestigious institution, and to the legitimacy of the Nigerian state itself, of the partisan politicization and de-professionalization of the leadership of the CBN.
- “Our apex bank, along with the judiciary, is one of the key institutional prisms through which foreign countries and investors abroad and at home assess the functioning or otherwise of the Nigerian state.”
He also warned that turning CBN’s mandate into a “political football” was and is a big mistake and a strong indicator of state failure.
What you should know: The CBN broke its silence on the controversy surrounding the naira redesign policy, they said old N200, N400, and N1000 remain legal tender till December 21, 2023.
This came a week after the Supreme Court ordered the FG to accept old notes as legal tender for the period.
I don’t know the institution that has failed here aside from CBN whose independence Moghalu is trying to protect. Policies must have human face. People have started dying in pursuit of their hard earned money stashed in the bank. If not for some Governors minus Obaseki that approached the Supreme Court for interpretation and guidance, the problem would burn over and you Moghalu would take the next available flight out of the country. We agreed to democracy where the rule of law operates. It is shameful that people were using naira to buy naira and Moghalu never saw the reason to advise the CBN to review the obnoxious policy. The first quarter will be gone in some few days, what have achieved economy-wise. The economy was dunking deeper into death zone, yet some opinion leaders were urging the CBN on. If the bsnks consistently respond to customers need, this mess will be cleared within two weeks and we start Q2 on a stable footing. Opinion leaders or economic experts should always talk from the position of workability of policies. Now Emiefele was subtly thrown under the train not bus this time